Constellation Software Stock Falls in Its First Session After Q3 Results
Constellation Software stock was quoted at C$3,238.38 at 10:17 a.m. ET on Monday, 8.17% below Friday’s close of C$3,526.52, with the market open and the figure still moving. Yahoo Finance is the source of that quote and of the closes used throughout.
The company’s October 16 advisory said the quarterly results would be disseminated “after the Toronto Stock Exchange closes on Friday, November 6, 2026”, and set a third quarter conference call for 8:00 a.m. ET this morning. This is the first session in which the market could price either.
Constellation reports in US dollars and its shares trade in Canadian dollars, so every figure below carries its currency.
The session around it went the other way
At the same timestamps, the Nasdaq Composite was up 2.25%, the S&P/TSX Composite up 1.25% and the iShares Semiconductor ETF up 5.55%. Canadian technology was mixed rather than broadly bid: six of the other fourteen names in Canada’s technology sector ETF were also lower, the furthest of them Enghouse at negative 1.77%. Constellation was far and away the largest decliner.
Constellation has closed down this much twice in nineteen years
Across the 4,776 daily closing changes from October 26, 2007 to November 6, 2026, exactly two fell further than Constellation was down this morning: July 27, 2018 at negative 8.98% and March 16, 2020 at negative 8.41%. None of the 1,254 sessions since November 2021 did, the worst of them negative 8.12% on March 11, 2026. That record is the durable half of the comparison. The negative 8.17% it is measured against is an intraday quote with hours of trading still to run, so where this session finally sits beside those two closes is a question for the bell.
Friday’s close was a one-year high and today’s price is a mid-October price
That rarity reads differently once you ask what the price fell from. Friday’s C$3,526.52 was Constellation’s highest close of the last 252 sessions, and the stock had climbed into the print: C$3,447.02 on November 2 to that close is a gain of 2.31%, against negative 0.03% for the S&P/TSX Composite across the same five sessions. This morning’s C$3,238.38 is not a low. The last close beneath it was October 21 at C$3,236.06, and 196 of the last 252 closes sit below where the stock is trading now. So a very large single-day move takes the price back to mid-October.
Constellation took 2.13 points out of Canada’s technology sector ETF
A Canadian investor holding the sector rather than the stock felt this morning through the iShares S&P/TSX Capped Information Technology Index ETF (TSX: XIT). BlackRock Canada’s published holdings for the fund as of November 6 put Shopify at 26.71% of it, Constellation Software at 26.05%, Celestica at 18.18%, CGI Class A at 10.63% and Descartes at 5.61%.
Each published weight multiplied by that name’s move at 10:17 a.m. ET gives its contribution to the fund in percentage points. Constellation takes 2.13 points out. Celestica, up 6.79%, puts 1.23 points back, offsetting 58% of it. Shopify adds 0.14 points, CGI subtracts 0.12 and Descartes 0.04, and the nine smaller positions together move it by less than 0.05 points. The 14 names, 99.70% of the fund, sum to negative 0.89 percentage points of contribution. One company’s quarter lands this hard on a diversified index holder because the index holds so few names, which we examined in our piece on the concentration of Canada’s technology sector ETF: the three largest holdings are 70.94% of the fund.
Each iShares XIT holding’s contribution to the fund in percentage points on November 9, 2026: BlackRock Canada’s published weight as of November 6 multiplied by the name’s move at 10:17 a.m. ET. Constellation Software takes 2.13 points out, Celestica puts 1.23 back. Weights from BlackRock Canada’s fund holdings file; moves from Yahoo Finance live quotes; contributions are our arithmetic on the two.
Revenue rose 19% and organic growth was 2%
The Q3 2026 press release puts revenue at US$3,512 million for the quarter, up 19% from US$2,948 million. Net income to common shareholders was US$212 million against US$210 million, up 1%, or US$10.01 per diluted share against US$9.89. Cash flows from operations rose 5%, or US$33 million, to US$717 million from US$685 million. Free cash flow available to shareholders, the company’s own non-IFRS measure, went the other way, down 16% to US$443 million from US$529 million. Acquisitions completed in the quarter took aggregate cash consideration of US$484 million including acquired cash, plus estimated deferred payments of US$125 million, for total consideration of US$609 million. Our full read of the Q3 2026 filings covers the rest, including the IRGA revaluation charge and the acquisition and segment detail.
Organic growth was 2% in the quarter, and 2% again adjusted for foreign exchange. The MD&A publishes the quarterly series twice, and the two bases read differently.
| Organic growth, total revenue | Q1 2026 | Q2 2026 | Q3 2026 |
|---|---|---|---|
| as reported (MD&A p4) | 6% | 3% | 2% |
| adjusted for foreign exchange (MD&A p5) | 1% | 1% | 2% |
The reported series slides because the first quarter’s large currency benefit has since faded. Strip currency out and the third quarter is the strongest of the three.
The multi-year softening sits in the company’s own stability metric
Page 5 carries a third table: organic growth in maintenance and other recurring revenue, adjusted for foreign exchange, by business group. The filing introduces it as the measure “viewed by management as a key metric that indicates the overall stability of the customer base.” On the consolidated line it has been easing: 3% across the first nine months of 2026, against 5% for the full year 2025 and 6% in each of the three years before that. The third quarter on its own reads 4%.
The drag is concentrated. In the quarter, the US healthcare group excluding Altera ran negative 10% on that measure and Altera negative 8%, while Constellation excluding both grew 5%. Across the nine months that healthcare line reads negative 5% rather than negative 10%, so the quarter is not a run rate.
The MD&A attributes the longer-running healthcare decline to “a combination of hospitals consolidating onto larger vendor end-to-end solutions along with the consolidation inside hospital and physician practices and the subsequent adoption of incumbent systems”, and adds: “We anticipate this trend to continue for the foreseeable future.” It continues: “Historically we have been successful with mitigating the impact by managing the pace of attrition via active product management and strong customer relationships. We have seen success with delaying known attrition in businesses that we have owned for more than a decade.”
The quarter itself it treats separately: the decline in the period “is largely due to the acquisition of two businesses made in the period that are experiencing very high customer attrition rates.” The attrition was known and modelled when those investments were made, it says, and the investments are expected to achieve acceptable returns. It then quantifies the effect: “Excluding these two businesses the organic decline for the US healthcare group of businesses excluding Altera would have been negative 3% for Q326.” On Altera: “A significant portion of the decline is directly attributed to the departure of several sizable clients, which we expect will run its course by the end of 2027, as these are multi-year transitions.”
The same price against the company’s own cash measure
Page 14 prints quarterly free cash flow available to shareholders per share. The last four readings, US$19.97, US$34.60, US$16.28 and US$20.92 from Q4 2025 through Q3 2026, add to a trailing twelve month US$91.77 by our arithmetic on the company’s figures. The quarter’s 16% fall is only part of the measure’s year: across the nine months to September 30 it rose 21%, US$1,522 million against US$1,259 million on page 3. Those per-share figures are additive because the share count has not moved: 21,191,530 common shares as at November 6, 2026, the same count printed in each of the last five annual MD&As. A flat count also makes revenue growth and revenue growth per share the same number, the measure behind our ranking of Canadian growth stocks.
At the Bank of Canada’s November 6 rate of 1.4113 Canadian dollars per US dollar, Friday’s close converts to US$2,498.77, or 27.2 times that trailing figure. This morning’s C$3,238.38, converted at the same rate so that the only thing moving between the two numbers is the share price, is US$2,294.61, or 25.0 times.
Disclaimer: The content on bestcanadianstocks.ca is for informational and entertainment purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always consult a qualified financial advisor before making investment decisions. Share prices, index levels and the iShares Semiconductor ETF reading are live intraday quotes from Yahoo Finance taken at 10:16 to 10:17 a.m. ET on November 9, 2026, with the market open, and are credited to Yahoo in plain text. Constellation Software’s daily closing prices and the counts drawn from them are also Yahoo closing data. Company figures are Constellation Software Inc.’s own for the three and nine months ended September 30, 2026, from its third quarter 2026 press release of November 6, 2026 and its Q3 2026 Management’s Discussion and Analysis, with the page cited at each use; Constellation reports in US dollars, so every company figure is US unless it carries C$. The release and conference call timing is quoted from the company’s own conference call advisory of October 16, 2026. Fund weights are BlackRock Canada’s own published holdings for the iShares S&P/TSX Capped Information Technology Index ETF as of November 6, 2026, a file struck on November 6 closing prices, which is why it is the correct base for a November 6 to November 9 move; every quoted name’s prior close was checked against that file and all fourteen matched. The exchange rate is the Bank of Canada’s daily rate for November 6, 2026, Valet series FXUSDCAD, used at both ends of the multiple so that only the share price moves between the two figures. Figures described as our arithmetic are our own calculations on those published numbers: each contribution in percentage points, the trailing twelve month free cash flow available to shareholders per share, and the two multiples.
